I'm not sure what I am doing wrong but if I use script/server everything works fine. I assume my problem has something to do with routes but since I am just learning RoR I am unable to make sense of it...

# You can have the root of your site routed with map.root -- just remember to delete public/index.html.
# This make http://domain.com/ampersand work
map.connect 'ampersand/:controller/:action/:id', :controller => 'greeting'
# See how all your routes lay out with "rake routes"
# Install the default routes as the lowest priority.
map.connect '/ampersand/:controller/:action/:id'
map.connect '/ampersand/:controller/:action/:id.:format'

All is working here, but I assume my routes above are primitive and could benefit from review by a seasoned Railer.